code, the carried interest -- >> none of it's illegal. he's taking advantage -- >> i'm sure that's true. to have $50 million in the cayman islands or whatever, it feels like that's going to become a bigger issue. and it might box him in of whether he can propose tax reform. >> thanks for joining us. great seeing you. that does it for us today. make sure you join us tomorrow. "squawk on the street" starts right now. good morning. welcome to "squawk on the street." i'm melissa lee with jim cramer and david faber live from the new york stock exchange. carl quintanilla continues on assignment today. let's take a look at futures and how we are setting up here in the united states. an up open with the dow looking to add about 11 points. at the open the s&p looking at about two. as for europe, the wait continues. prime minister of greece expected to meet with party leaders today. we are seeing green arrows pretty much across the board with the dax tacking on about a

half a percent in gains this morning. david? >> thank you, melissa. let's hit that road map. i want to start with two dow stocks this morning. mcdonald's continues to deliver, posting better same store sales numbers across regions. disney reports a revenue miss but says theme parks and pricing looking up. a positive conference call. we'll have more. time warner, it beat earnings estimates. people look at ebida. raising its dividend. sprint shares surging on its quarter. i'll take a look at that. >> once again, a greek debt deal is imminent and the ecb reportedly agreeing to accept a concession on greek bond holdings that could cut greece's debt by up to 11 billion euros. >> facebook catches critics' eyes once again. more diversity on facebook's board while "the new york times" uses mark zuckerberg as a poster boy for tax reform. >> a lot to talk about. of course, we'll start off with mcdonald's.

same store sales out. shares higher in the premarket trade. globally same store sales jumped 6.7% in january. in the u.s. 7.8%. also exceeding expectations. breakfast and chicken mcbites, a limited menu item, limited time offer, drove the results there in the united states especially. >> jim skinner. let's talk management here. just like david novak yesterday with yum. skinner is remarkable. people at home have to recognize the guy at the top can drive things. and one of the things that i am continually amazed about with mcdonald's, these numbers are the kind of numbers you would expect from a very young chain. not from a mature chain. well done, mcdonald's. >> european growth was also surprisingly strong. >> yes. >> 4% same store sales gain versus a 3.4% expectation. i'm wondering, some people might argue that what's going on in europe would help a mcdonald's with the lower priced items. some people would say, no, it

would still hurt given all the austerity measures and concerns about just what is going on in europe overall. here we are delivering on expectations. >> you always hate to be anecdotal. you've got nothing but incredibly expensive restaurants. you've seen the movie "taken." you can see the places they go to. one of my favorite movies because i also have a particular set of skills that's a nightmare for some people. what i like about it, if you go to the mcdonald's which is right there, you get a 6 euro meal as opposed to a 60 euro meal everywhere else. it is a dramatic disparity. it's the place to eat in paris on fixed income. >> at this point mcdonald's just off of its all-time high. all-time high somewhere around 102.22. looking to open 101 and change. i know you're a mctondonald's

believer. >> huge. >> they got a nice dividend yield. at the same time, if you were to o overlay an options strategy, jim, would you consider overriding this? is it something else? protection? >> i'm going to come at it in a different way. i'm saying we are in a multiple expansion and higher earnings market in a euro where interest rates a -- era where interest rs are still too low. you'll find stocks, disney in this discussion, that literally you thought that this thing couldn't go any higher. suddenly you get an 18, 19 multiple on consistent earnings equivalent to what coca-cola's getting, general mills is getting, because they just don't miss numbers. that's how i'm playing zblit it's. >> buffalo wild wings set to open right now at what looks to be a 52-week high at least. it was up 15% in the aftermarket session. the price of wings really the concern going into the quarter as a percent of cost.

they have increased year on year. >> true. i believe wicker is the key. sally smith, ceo, on this show said don't worry about wings. the day before the company reported miller taybeck came out with a devastating piece saying wings are going to be a problem. sally smith, ceo, right in their face said the wing problem is overblown. we will do the 20%, hence a dramatic short squeeze. >> right. >> the wing problem is overblown. not talking about boeing. let's move on to shares of sprint. check them out right now. company posting a quarterly loss, 35 cents a share excluding certain items. analysts had been looking for as much as a 37 cent share loss. stock may look up. the call is going on right now. big picture for sprint really is they're just trying to hang on. i think that's the best way to put it. the company's trying to hang on for a very difficult period right now. they've got the iphone. yes, they're dealing with subsidies. ebida was better than analysts

anticipated. they had fewer postpaid ads of new subscribers. >> they need money is what you're saying. they need money. >> on the call just now they said we're going to need at least another $5 billion to $7 billion. people forget how generous our capital markets have been for some time now. >> right. >> and the benefits of low interest rates for corporate america in terms of balance sheet repair. sprint would be one of the keys in terms of benefits from that. they're going to come back to the market, no doubt about it, in the not too distant future. i mean, the credit markets, for an offering, one would expect. they've got to get through the first half of this year. they're talking about a u-turn in terms of margins and that '13 will bring better things. a matter of survival. >> they're doing well. they're executing well. they're stuck with the technology, nextel technology that they have to transition from. >> that's right. >> the ceo doing a remarkable job. he's got a lot of people jazzed to buy the common stock. david, i listen to you and i think, common stock?

fools errand. >> it's still an option, i think, in many ways. >> you do? >> i think so. 2 and change. >> kind of the way sirius satellite was but you should have bought the preferred. there's leverage in the business. leverage as in debt but also leverage if and when they actually do turn margins and get things going. can they compete against verizon and at&t in a significant way? will the iphone truly help them? are they going to suffer in terms of the way others have? >> $5 billion to $7 billion in debt is what they'll have to rate? >> yes. >> that's their market cap. >> that's why it's a dangerous, interesting situation. and one that will bear watching as this year goes along to see if they make the progress he says. >> you already have a k-2 mountain of debt there. you're saying it goes to everest proportions. >> it will. they can support it if they continue to generate decent cash

flow. it's the beauty of having extraordinarily low interest rates. it may help them take out some more costly debt. we'll see. it'll be a very interesting offering to watch. by the way, they've said nothing on this other than they need to raise the money. >> right. >> we don't know when they're coming to market. >> i like your -- the analogies that you make. the metaphors. k-2 going to everest. >> trying to make it a little more interesting. look, do we cover a business itself that is inherently of interest to people? i think -- i'm not saying we have to espn the thing. this is not "pardon the interruption" even though i interrupt all the time. i do feel people have to understand visually how much debt there is versus equity or they'll think, wait a second, they're selling a lot of iphones? let me take down that stock not realizing that if that stock went up a lot, i think they'd sell stock. >> true. >> all right. what do we want to move on to? time warner/disney or facebook. >> facebook. >> okay. let's tell you about it. two big stories surrounding

facebook this morning. number one, there's an op-ed "new york times" in the concerning mark zuckerberg's tax liability. his options, the other -- the other complaints from the california state teachers retirement system. that's simply about facebook's board. they say they'd like to see a bit of diversity on that board. a lot of well qualified members on that board. but not any diversity. talking about a bunch of white men. >> sorry to interrupt. i just want to alert people to the headline running a t the bottom of the screen. 3m is promoting its coo to ceo. february 4th. yesterday they lifted the quarterly dividend by 7.3% to 59 cents. a lot of news out of 3m of late. >> remarkable company. dividend aristocrat. a lot of people wrote it off multiple times. always a big mistake. very big asian leverage. like it very much. good balance sheet. >> circle back to facebook. >> the tax story is just using zucker berg as an example "new

york times" in the. listening to austan goolsbee talking about mitt romney and what will take place during the campaign if and when he is the assumed nominee for the republican party and what ultimately will take place in terms of tax reform, it's interesting yet another question. there you're looking at the board members, by the way. that's what we're talking about. melissa, it is kind of interesting. >> all white men? >> they couldn't find a woman? really? >> they couldn't find a woman? they couldn't find a minority? >> it's 2012. >> do they get a free pass because they've got sheryl sandberg at a high position? there's a huge "new york times" article about how she's one of the most powerful women in silicon valley, maybe corporate america at this point. does it give them a free pass at this point? do we need representation on this board? >> how about job creation? how about great -- you know, earnings on revenue? how about the transparency that they're offering? no. we're focused -- i'm not saying it's nitpicking. diversity is different. i'm saying this guy is really coming under a lot of fire. >> the only thing i would say is they seem to have done such a good job focused on so many

things to become a company that's around for a very long time. they've really planned for the ipo well. i think they've managed so many things well. one would expect that they would have had a conversation about the composition of the board. >> what's interesting, calster has been an investor in facebook through private equity investments. they're agitating more vocal fashion at this point on the eve of the ipo. what happened before? because callister and calpers, two pension funds. specifically diversity in corporate boards for a very long time. they have a database which can be used by shareholders and companies to find board members. the question i have, do we just not know that they were agitating for this before and now we know because facebook is on the eve of its ipo? i don't know. >> good thing is, you can make changes to boards. >> yes. >> yes, you can. >> that could happen. >> sometimes it doesn't happen soon enough in the case of yahoo! of course, many would argue. that took too long. we did see those changes yesterday, finally, from yahoo!.

roy bostock saying good-bye when he should have probably done so quite some time ago. over four years ago microsoft made the unsolicited bid to buy yahoo!. they failed to sell the company at that point. microsoft did come up higher or express their willingness to do that. now you're look ageing at a stot 16. they replaced four board members with two. leaving more room, perhaps, to even say to dan leob, large shareholder who is active but doubtful -- but to say, hey, you want to give us an idea of perhaps another board member or two? and then the key being are they going to actually be able to successfully spin off those asian assets in the form of the stakes in alibaba. >> here's yahoo! creating no

wealth, no jobs. yahoo! we talk about make these changes, make that changes. i'm not trying to minimize the complaints about facebook. i'm in awe of what facebook has done. take a look at "usa today." there's a remarkable piece about how social media was the dominant theme of super bowl ads. each piece talks about facebook. you talk with sally smith, ceo of buffalo wild wings. one of the top restaurants on facebook. this is a remarkable jutter naugh juggernaut. >> coca-cola has a fan page. not even made by coca-cola. made literally by true fans of coca-cola who are on this facebook page sf. >> don't you find that remarkable? >> how does facebook monetize? can they? can they capture the revenue somehow? >> i called procter & gamble. literally i'm using that as a straw man for maybe too many

cases. proctor identifies facebook as being the single most economic way to be able to get in touch with people. when you're a consumer goods company if you can get people hooked on crest at 16, they'll stay with crest for most of their lives. every advertising guy i've ever met has said if you could ever reach the holy grail demographic, you've got the home run. facebook has the holy grail demographic. when we come back, spike in price of gasoline. forecasters are seeing fuel costs rising in the months to come. do transports have the right business models to blunt the impact? before the break, a little politics. three states holding republican primaries last night. rick santorum sweeping the field. he took missouri, colorado and minnesota pp the victory is calling into question mitt romney's ability to appeal to the conservative base of the republican party. there he is. a victorious an tor um, at least for last night. back in two minutes.

welcome back to "squawk on the street." well, the ecb may take some concessions with regard to what the value of their paper is with regard to greece. how is it affecting our markets? well, you know, we tested 2% earlier. we backed away. the bund also basically getting to that 3% level and backing

away but holding very close. portuguese 10-year around a 13.60 yield. definitely down from its kind of 17.5 highs. still by history's standards, still significantly high. but if you move to italy and look at their 10-year around 5.60, certainly still high by historic standards. relatively speaking it's coming down rather substantially. then you look at a telegraph story. with all this potential agreement out there, it seems as though some in the eurozone press believe that, hey, if greek after all of this wants to exit -- we are at that final intersection with greece. going to be interesting to see how it plays out. 1:00 eastern, 24 billion new, not reopened 10s. i'll be covering it at the top of the one. back to you. >> thank you, rick santelli. ipad fight. a chinese company says it was using the name ipad long before apple. it's one of those he said, she

said. he sues, she sues stories. now they're suing apple for $1.6 billion for trademark infringement. if apple ever had to change the name of the ipad, what should it be changed to? that is the twitter question of the day. tell us. cnbcsquawkst what you think the name should be if they had to change it. >> what's so interesting, ipad hasn't been along for that long. i can't even imagine what it would possibly be called other than ipad. >> i can't imagine living without one. >> that important to you, huh? >> yes. yes. that and my siri. which is also the iphone 4s. siri wakes me up every morning. >> how does she wake you up? >> you are having a love affair with siri. >> is she rough or is she gentle? does she say, jim, it's time to wake up, or does she say get up out of bed. >> let me just say she has no morning breath. >> okay. >> all right. on that note, coming up next, the run for your money. get ready for cramer's mad dash. as we head to break, take a look

one more at futures, how we're setting up on this wednesday morning. it does look like an up day for the dow, s&p and nasdaq at the open. ♪ ♪ [ male announcer ] offering four distinct driving modes and lexus' dynamic handling, the next generation of lexus will not be contained. the all-new 2013 lexus gs. there's no going back. ♪ all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go.

optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. [ kareem ] i was fascinated by balsa wood airplanes since i was a kid. [ mike ] i always wondered how did an airplane get in the air. at ge aviation, we build jet engines. we lift people up off the ground to 35 thousand feet. these engines are built by hand with very precise assembly techniques. [ mike ] it's gonna fly people around the world. safely and better than it's ever done before. it would be a real treat to hear this monster fire up. [ jaronda ] i think a lot of people, when they look at a jet engine, they see a big hunk of metal. but when i look at it, i see seth, mark, tom, and people like that who work on engines every day. [ tom ] i would love to see this thing fly. [ kareem ] it's a dream, honestly. there it is. oh, wow. that's so cool! yeah, that was awesome! [ cheering ]

[ tom ] i wanna see that again. ♪ just before the bell rings, time for cramer's mad dash. we didn't get to disney.

going to be important. obviously a dow component. positive conference call. especially in advertising. >> i like what iger, the ceo, has done. he said we're not going to make movies for the heck of it in order to generate revenues. we're going to make smart movies. everyone's talking about coin star. can't get rid of it. what's he saying? he says i'm going to sound stupid here. i read the verizon red box article about four times and turned it upside down and sideways and still not 100% sure i understand what they're offering. i don't understand it either. it generated short squeeze in humongous proportions. >> it did. >> that's the kind of thing people have to be careful at home. there's a lot of short. open table. it gets two downgrades. now it's going down. these are professional battlegrounds. >> disney call well reviewed by those who are on it as well. i mean, when you get a ceo who's confident enough to say i don't know what the heck this is about, it sort of speaks volumes in some ways. he's been there long enough, i think, and has done enough --

>> how about time warner? >> certainly solidifying his position at the top of the company. but i wouldn't quite say that they performed as well as disney at time warner. nonetheless, we can take a look. the stock does look up today. they are increasing the dividend. they are buying back a good amount of stock. reupped to $4 billion buyback. but they're right at -- they're 2 1/2 times levered right now. that's where they want to be. additional buyback some are saying may actually be less than anticipated as a result. they aren't going to be able to add more debt to buy back stock. they're simply going to do it from generating cash flow. >> scripted tv. they make a fortune. harry potter. what a franchise. >> it was the last one. >> that's it. that's right. it's the last one. they even call that out. harry potter, done. >> it is cable networks and the growth there that's the key for time warner. they already gave us a little warning or guidance early in january to conference. people had pulled back their estimates. another reason why the stock actually may be up today. >> yeah.

>> eps looks okay, by the way. people don't judge it on eps. >> in terms of an open table, getting back to the whole notion of a short squeeze, what do you make of it when a stock moves sharply higher as we were watching open table do in the premarket session but analysts on wall street remain positive on the stock saying there's more upside. i'm curious. how do you separate what a fundamental analyst might say, granted they're not always right, versus what the technicals of the stock are telling you? >> these are true parsing of call analysts. in other words, there's a line in the conference call which says the comparers are going to get tough. the negative analysts have seized on that. the positive analysts are saying, listen, we've still got 25% growth. it's not that expensive story. in the end what is this story about? it's about the fact that there are just 10 million shares short with 19 million shares float and they bought back a lot of stock. >> all right. got to take a break. get ready for another big day of trading. more "squawk on the street" straight ahead. it's already wednesday.

half the week is gone. but there's still plenty of hump day trading to do. the opening bell is next. which of these 500 stocks have you antsy? "squawk on the street" will be right back. [ horn honks ]

hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real business. today is gonna be an important day for us.

you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up $600 when you open an account.

♪ you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell set to ring in just about a minute. gold is down. oil perking up towards 100 bucks a barrel. >> we just keep hearing that. >> why do we not care about rising gasoline prices? >> there was an article today about gasoline going to $4.50. it's incredible. restaurants usually get hit. retailers. retailers and restaurants just talking about a great start of the year. >> it's a good question. will it be one of those things suddenly we're all talking about it and we haven't been because we see it? >> or have cars gotten so mileage better that people don't think about it? >> it hasn't gone up that much in two years or a year since the last time -- >> it's -- is it a whistle past the graveyard story? i think one day we're going to wake up and say, listen, we can't make our numbers because of gasoline. hasn't happened yet. >> the head of citi's global energy practice told us on "fast" he expected an epic gold

run in gas. >> i got to tell you, if you're on the panera call, you're not hearing it. if you're on the buffalo wild wings you're not hearing it. >> you're hearing the opening bells. the s&p 500, cnbc realtime exchange. here at big board, epalm systems a software engineering and i.t. consulting firm celebrating its initial public offering. nasdaq. >> the restaurant group is so red hot. >> it is so red hot. >> just amazing. >> getting back to this point of $4 gasoline not seemingly affecting them. i don't know when the two start to happen. maybe you're right. maybe it's fuel efficiency or i should say mileage efficiency has gone up greatly. >> is the consumer this strong? is the consumer just saying, okay, look. we've hunkered down and now we're going out. we're not going out at high price points.

on the panera quarter, clearly doing well. opening more stores. chipotle, doing well, opening more stores. they don't have a $15, $20 price point. >> we're still at 8.3% unemployment. i find it hard to believe the consumer could be that strong. are they simply making a decision forget this delevering. >> macy's doing well. nordstrom, the malls. a great -- how can you have employment so punk. fabulous retail. wyn. lodging numbers are fabulous. we had that from starwood the other day. lodging numbers, people are traveling. people are spending. disney, theme park numbers. just terrific. >> to the extent this is still an economy that relies, of course, on the consumer. great manufacturing is up. two-thirds to three-quarters of our economy -- >> service. >> right. >> ralph lauren. look at ralph lauren.

>> are we perhaps underappreciating the robustness of this robustness? >> yes, we are. i think one of the things that you constantly have to keep in front of you is, when you're seeing these numbers, these are genuine surprises. when you listen to the conference calls, people are almost -- they're in disbelief. we have a lot of analysts continually downgrading stocks because of valuation. the companies blow away the numbers. it's extraordinary how strong the consumer is. extraordinary. not talked about enough. >> you think it's going to continue. >> yes, i do. >> you do? >> other than the bonuses at the -- at the goldman sachses and the morgan stanleys of the world, midwest, fabulous story today. we saw a terrific story about how oil and gas is powering this economy. i do believe that in the midwest, autos, oil and gas, chemicals, there are jobs. there's business being created. i think it's a undertold story because it's not on the coasts where we tend to concentrate way too much. media bias. >> we tend to do that. when it comes to the east coast, particularly the northeast part

of the country, we've had an extraordinarily warm winter. yesterday we were talking about walgreens. primarily in terms of pbm -- there is an element people aren't getting sick enough. >> i thought cvs -- i thought parago did not blow away numbers. what's one of the call-outs? not a big cold and flu season. at the same time, you could argue that panera and buffalo wild wings beneficiaries of warmer weather. people going out more. you can't underestimate the weather. it plays halvoc for companies that need to have a lot of cough syrup sold. mucinex going generic. parago will talk about it tonight in the second half. you're just not seeing a cold and flu season. >> right. a good thing for us. but it will come back as it always does. >> yes. >> anything else you're watching as we start trading? >> yes. there's just continually negative stories about coal. i think people have to stay on top of the coal story. ubs pulls joy, joy global.

really an amazing china story. we are not selling thermal coal in this country. it's backing up. it's hurting csx. first energy today announces three coal plants going to be closed in west virginia. natural gas is at a level that is also just a disruptional level in this country because it's so cheap. it's making everybody rethink. >> chesapeake obviously pulled back from new capacity. exxon said, nope, we're keeping the pedal to the metal. >> anadarko. this country turns out to have so much oil at 16,000 feet that we're dazzled. there's so much oil in this country. another untold story. got to keep those positive stories in front of people. because they help explain why this market is not quitting. >> no. it could obviously change this entire economy and it's starting to. certainly not just from job creation but so many different ways. >> marcellus shale, pennsylvania, putting a tax on it. being able to balance the

budget. we find state governments being able to do better because of oil and gas. ohio could be better because of utica shale. every time you look at stocks, what the heck? how did that stock break out like this? there is spending and strength to this country. republicans don't want to call it out because it's too positive for obama. obama doesn't want to call it out. he feels it's insensitive to the people who are unemployed. bernanke completely not calling it out because he's worried about taxes going up next year. >> is that what he's worried about? >> yes. he said it in the text. >> melissa, sending it to you and bob. >> everybody's focused on -- you're focused on tomorrow's story. >> let's forget about the incredible shrinking greek politicians. the greek politicians in hiding. you should see the names i've heard this morning about what's going on over there. nothing going on at the moment. but it's drage time. mario drage, having a press conference tomorrow. ostensibly they'll talk about interest rates. probably cut them later in

march. maybe in the second quarter. the important point is, he'll be pressed on what he's going to do on greece. draghi could come out and say now that we've got a deal on that side, here's what the ecb can do. now he's going to be constrained unless some miracle happens with greece. he's not going to feel free to talk that much about greece because there's still no deal out there. they're messing things up over in greece. not helping themselves. obviously draghi is under pressure to take some of the profits they have from all of these greek bonds. they've been buying them 70 cents on the dollar. give it back to greece at face value or exchange it for bonds in the esfs and let them give it back. somehow kick back some money to greece. he's going to be very constrained now on what he's going to be able to say. >> when you say unless a miracle happens today in greece, are you saying if they reach a deal today of some sort that would be a miracle? is that what traders are thinking?

>> i think so. draghi would be in a lot better position if a deal was announced today and would be able to say something tomorrow. he's going to be more constrained tomorrow if nothing happens. meantime, by the way, there's supposed to be meetings today of the greek political parties. they actually have the paper in hand on what the erm tterms of deal are, supposedly. meetings are postponed. several times there was supposed to be meetings. the one company i want to move on to today -- >> ingersoll rand. they make all the stuff behind the walls nobody pays attention to. heating, ventilation, air-conditioning systems. locks. they have divisions that are industrial as well as residential. and they are globally diversified. 40% of their revenues are outside the united states. it's a terrific company to pay attention to on what global macro situation is like. here's the good news. the good news is, their industrial base has been doing terrifically recently. and their heating and ventilation systems are doing

well. here's the bad news. the residential side is not doing well at all. that's really hurting them. that's hurting some of their guidance. very conservative guidance, below expectation. there's the good news. finally i want to note, david, ceasars, did happen. here's what's important. exactly what you and i were talking about yesterday. the sec wanted to look at how they were talking about the additional stock sale by some investors. there is 12 million additional shares that could be available immediately. 12 million in the next six months in addition to the 1.8 million. >> quite an overhang. >> we're seeing so many things work here. ingersoll rand. stock up big. ralph lauren up 15 points. ingersoll rand was a genuine miss. what happened if they made the number? >> very disappoint -- very conservative guidance.

>> ralph lauren shares. >> black label. not the beer. bob, are you not impressed by the fact that stocks that are already up continue to break out and go even higher? >> yes. in theory, we are oversold here and due for a pause. but the momentum is so strong and a lot of people believe that -- regular investors, people who are active traders are still significantly underinvested. they didn't go along with a lot of rally in january. they're still playing catch-up. that may be the primary factor we continue to move forward. >> they're in bonds, for heaven's sake. >> i just got the latest numbers on morgan stanley for hedge fund performance. the average equity long short hedge fund was up 3.6%. >> it under performed even the s&p. >> in january. >> in january. >> the whole s&p was up 7%. >> yes, it was. that is a good point. >> what a job, hedge funds. >> can you spell spy -- invest in spyder.

>> i think the -- >> they're all short netflix going into the year. it really is a remarkable filing, defuation, in that stock pickers and mutual funds that pick stocks are really just blowing the doors off. keep that in mind. >> actively managed are ahead of the market for the first time in years. >> correlations are going down. >> right. >> thank goodness. >> does feel like the hedge funds are still all in the same trade. that continues to be the issue there. one that a lot of investors have to be aware of. let's shift to bonds and the dollar. we're going to go to rick santelli at the cme group in chicago. rick? >> thanks, david. i think we need to concentrate on forex here. look at the chart of euro versus dollar back to the beginning of december. a couple things should jump out at you. the euro is at the highest basically in two months against the greenback. we know that. more importantly, look at that mid-january low. a little bit under 1.27. how many of the best minds that

trade and analyze fx were telling you 1.20 or 1-1. maybe we don't want to talk about it. we're passing through one of the biggest insolvency issues i've ever seen with regard to a group of countries, and that's all you get out of it. 1.26. maybe it's because it's very difficult to compare currencies when each of the currencies in countries has its own litany of issues. so the word of caution here is, it explains to some extent while gold is such a key commodity. but it also shows a void of really looking at a region of the world and trying to call it right and how you won't get paid if the only trade you do is a pairing of relative value of two currencies. interest rates moved higher, tested 2% in a 10-year. it has moderated a bit. some traders down here scratching their heads. back to you. coming up next, twitter time. if apple's ipad needed a new name, what should it be? let us know @cnbcsquawkst.

as we head to break, take a look at this morning's early movers on wall street.

here's some of the stories we are stalking about. about 10, 15 minutes into the trading day. 3m naming chief operating officer ceo. ralph lauren reporting better than expected quarterly numbers. that income hit $169 million. that stock up sharply as you've seen. mcdonald's also reporting much

better than expected same store sales. and that stock also reacting somewhat positively. here's a check on all three as you see with mcdonald's barely in the green. of course, ralph lauren by far one of the biggest percentage gainers. in fact, all day speaking to that strength of the consumer that mr. cramer was talking about just moments ago. time now for squawk on the tweet. ipad fight. a chinese company says it was using the name ipad long before apple was. so now they're suing apple for $1.6 billion for trademark infringement. today we're asking you if apple ever had to change the name of the ipad, what should it be changed to. brian tweets, life pad. the thing has become a go-to hub upon waking up, throughout the day and even before bed. jeff tweets the new name for the ipad, the i do not spend quality time with my family anymore. that's sad. will tweets, a logical choice would just be the i tab. a good one.

doug tweets, would the simpson's sue if they renamed it to the my pad. trading day is young. much more "squawk on the street" straight ahead. coming up, professor cramer is revving up his lesson plan. pay extra close attention to his six stocks in 60 seconds. there will be a quiz. now, sit down and shut up. we'll be right back. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing,

and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

take a look at shares of computer sciences. css up by 22%. the company reporting earnings better than expected, naming a new ceo. we're seeing that stock surge. 32.38 last level there. let's check in with simon hobbs, see what's coming up in the next hour of "squawk on the street." >> we're going to be rolling the dice on ceasars. the opening trade. instant analyst of the casino operator's ipo. we're going to look at strength in the market coming from fast casual restaurants. speaking of fast and casual, we will explore the business world of bacon milkshakes, guys. yum! >> did you say bacon milkshakes? >> bacon milkshakes. >> better take that with lipitor. >> i think they put it in there, actually. the lipitor comes along with it, yeah. generic version, of course.

>> all right. keep the costs down there. time for 6 in 60. six stocks, 60 seconds. owens corning downgraded from a neutral to buy. >> i don't like this call. there were a lot of storms this quarter. owens corning can tell a pretty good story about housing. >> yum brands. >> if you had a sell on this whole way, just get big, go home. >> harley davidson announcing a 24% dividend increase. >> such a better balance sheet than they used to have. harley davidson sales are amazing. >> bhp billiton a rare fall in earnings. huge company we don't talk about enough. >> go buy freeport which increased the dividend rather dramatically. 2.7% yield. >> that would be a pretty big deal, my friend. >> free been poport as a common should be bought. >> borg warner. >> nike. price target increased. >> nike is like mcdonald's.

the classic growth stock that's come back. some people say -- i say it goes higher. >> all right. >> for more on these stocks, go to sots.cnbc.com. how come you don't like the owens corning call? i'm curious. yesterday we had a call. i forgot what specifically it was. it was before earnings. you said it was a gutsy call. you admire those kinds of calls. no reason to -- why would an analyst come out before earnings are reported and make a bold call. here we have the same thing. >> i think they don't believe in a housing recovery. and i believe in a housing recove recovery. i think that's at the crux of when you like an owens corning. if you believe housing stocks are going to go up, you'd be loathe to downgrade it. >> right. >> it's a future call. >> and in terms of some of the other housing stocks? >> spf. really remarkable quarter. >> massive quarter. highest backlog in homes since 2007. >> california very much back. california, people underrate california constantly. by the way, occidental hiring like that, california. oil, oil, oil. untold story.

america. >> we talked at the begins of the show about sprint. shares down about 5%. not a huge move in terms of a 12 cent loss. >> because you explained to people that the common stock is not the thing here. it's the bonds. >> we don't talk perhaps enough about the capital markets and how generous they've been to corporate america and how much repair has gone on for so many balance sheets across the board and enhanced cash positions and simply given companies a lot of flexibility as a result of low interest rates. >> sprint bonds have rallied over the course of the last ten days. very nice move. interesting. >> here's a news flash. apple another record high. 472.10. there's a stat. since steve jobs died -- when was that? it was in october, right? apple tacked on $90 billion in market cap. $90 billion in market cap since what has been -- who has been called the greatest ceo that ever walked this planet -- >> i agree. i think one of the things he did was he left behind multiple iteratio iterations. i'm told there's iphone 6 on the

drawing board. if we do get that ultimate twice where you can say, listen, i want right now to turn on "the voice." i want right now to turn on "smash." notice the allegiance here i'm showing. that show goes on. that's what i've wanted all my life. i have 17 clickers. i'm sick of it. >> interesting how well they handle succession there at the end of the day. you have to say, it's a key thing for ceos such as a steve jobs who are iconic ceos and when you look at a starbucks or fedex or companies like that that are so tied into their ceo, you have to wonder whether they are watching how well he did it. it would seem. thinking about their own transitions. >> tim cook a remarkably good ceo. >> i think about $90 million in market value added to apple. that's, like, an entire facebook. think about what facebook potentially could trade it in terms of pe. think of what apple trades at. a tenth? less than a tenth in terms of the pe? >> look, fiscal year 2012 numbers easily could go from 50

to 55 bucks. back out the $100 in cash. you can see this is a classically low multiple situation. the stock is just forever mispriced. reminds me of when coca-cola and pepsi tacked on point after point after point in the 1980s. just a remarkable situation. >> this thing, by the way, keeps ticking higher. continues ticking higher to new record highs. also want to bring you this report crossing on dow jones. according to to a memo to employees, goldman sachs's lucas van prague is officially retiring. so now it's official according to dow jones. >> lucas, shepherded the company through a very difficult time. >> not sure what he's heading on to do, if it's a true retirement. >> wow. >> yeah, okay. see who they replace him with. >> people have to understand when you're covering a story like goldman sachs, multiple stories, multiple rumors, you can always call lucas any hour of the day and he would set you straight. some would say he set you too straight. i always enjoyed his company. >> by the way, his replacement,

an aide to tim geithner. jake seebert. >> had been at alcoa. then called into duty for the u.s. treasury. con cig lair to secretary/treasurer geithner. >> he was tom hagan -- you can take your wife and mistress and go back to vegas for all i care. >> tom eggen. yeah, yeah, yeah. you not allowed to use consigliary? only in the case of the mafia? >> the company has tried to reclaim the notion that it is not the black hat during the era. >> right. what is coming up tonight? >> buffalo wild wings. sally smith. back to talk about the nonwing problem. paraigo. johnson & johnson.

w wyn. >> great line-up. >> huge line-up. >> all about this is earnings season. this is our nfc play off. i'm not calling it our super bowl. >> apple accounts for 18% of the market value of the s&p 500 information technology index. 18% of an index that has a $2.4 trillion market value. here we have it. >> very rare. this is a stock that's made retail money. when i go -- people tell me the market's rigged. the market's crooked. i us a come back and say, look. steve jobs left you with a vehicle to make a lot of money. certainly more than henry ford did. henry ford being the other great industrialist of america also without the predilection for, let's just say, demographic negativity. >> all right. we'll see you tonight, jim. >> thank you. >> 6:00 and 11:00 p.m. eastern time for "mad money." meantime, coming up, more on mark zuckerberg's tax options.

later on "squawk on the street" -- bacon is not just for breakfast anymore. now it's for your shake. yes. a bacon milkshake. our jane wells heads to jax in the box to find out more. all that and more when we return. ttd# 1-800-345-2550 let's talk about the typical financial consultation ttd# 1-800-345-2550 when companies try to sell you something off their menu ttd# 1-800-345-2550 instead of trying to understand what you really need. ttd# 1-800-345-2550 ttd# 1-800-345-2550 at charles schwab, we provide ttd# 1-800-345-2550 a full range of financial products, ttd# 1-800-345-2550 even if they're not ours. ttd# 1-800-345-2550 and we listen before making our recommendations, ttd# 1-800-345-2550 so we can offer practical ideas that make sense for you. ttd# 1-800-345-2550 ttd# 1-800-345-2550 so talk to chuck, and see how we can help you, not sell you. ttd# 1-800-345-2550 our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter.

if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that. [ jocelyn ] my name is jocelyn, and i'm a cancer survivor. [ mimi ] i had cancer. i have no evidence of disease now. [ erica ] i would love to meet the people that made the machines. i had such an amazing group of doctors and nurses, it would just make such a complete picture of why i'm sitting here today. ♪ [ herb ] from the moment we walked in the front door, just to see me -- not as a cancer patient, but as a person that had been helped by their work. i was just blown away. life's been good to me. i feel like one of the luckiest guys in the world. ♪

hi, good morning. if you've just joined us, this is where we are now a half an hour into trade at the new york stock exchange. bull market still intact. up 20%. the russell doing extraordinarily well. on the commodity markets this morning, no huge moves clearly on equity so far today. we're watching copper. you can see oil is trading at 99.67. gold down very slightly. now on to some squawk stories we're focused on this morn ing. mcdonald's has reported a better than expected rise in january sales. strength in the u.s. helped offset the impact of economic weakness in europe. mcd shares currently trading slightly lower. close to the all-time high. sprint nextel posting a wider fourth quarter loss as costs from the apple iphone weigh down on the number three

u.s. mobile operator. the loss for the quarter widened to $1.3 billion. we'll talk about that in a moment. yahoo!'s board, the chairman there, roy bostock announcing he'll step down along with three directors at the firm as the troubled internet companies continues. an interesting twist on apple and verizon. a note out by goldman sachs yesterday raising the question of whether verizon should drop coverage of the apple iphone. here's a look at how verizon shares have performed compared to apple since they started to offer the iphone. apple is clearly the investment to make. will power, senior telecom analyst at r.b. bare. he covers verizon as well as apple. both rated out perform. great to speak with you. i want to start out with apple simply because moments ago it hit yet another all-time high. 472.94 piat this point. think about how far the stock has come since steve jobs died last fall, about $90 billion in market cap has been added.

a lot of people would say that apple's valuation is still very low, specially when you back out the cash on a per share basis. at what point did you get concerned simply that the stock has run up so far in such a short amount of time? >> first, good morning. you're right. apple's had an enormous run as we all know. i think as we look at the product road map going forward, we continue to feel very bullish about prospects for apple despite the run. as you noted, you know, valuation in our judgment remains compelling here. trading around 11 times. using a 13 multiple to get to $550 for a target price. we think that remains very reasonable as we look at the opportunities. >> when you take a look at the product line-up, i'm curious. apple, the ipad 3 is expected to be an evolutionary product as opposed to a revolutionary product. itv may be a revolutionary product. we simply don't know. let's piece together some of the reports at this point, will. a 1,499 tv that can be operated

by voice or hand gestures. how do you bake that into your model? is this the reason why the stock is moving higher? >> i think it's contributing to it. i think more importantly as we look at the near term road map, as you know, you've got ipad 3 coming. potentially could include 4glte for the first time which will give it a nice bump up from where the technologies are today. of course, you've got iphone 5 we think in the second half of the year. potentially higher speed functionality. who knows what additional software applications they'll add to that. the itv is a potential upside opportunity we think more in 2013 and beyond. really not baked into the numbers and could provide further earnings upside. >> i'd love to get your take on sprint. shares of which are down. the company saying a number of things on the call, including, of course, this basic idea that, hey, you know what? 20 2012 is going to be a u-turn

kind of year. '13 is when we're going to perform. do you buy it? >> a lot of long term challenges still facing this company. they have the turn around under way. they have significant investment costs in front of them. 2012 is going to be a tough year. as you point out, the bet really is on a significant rebound in 2013 and 2014. there are a lot of uncertainties out there. too early to call. we're at a neutral rating. we would not yet be buyers of the stock. >> another company aggressively selling iphones and perhaps not doing as well certainly as apple is, is that the strategy you think they're going to continue to embrace? should they? and when it comes to the uncertainty, what should we be watching to figure out which way it's going to go? >> the iphone is an important piece of arsenal for all the carriers that offer it. look no further than the results of t-mobile, using customers hand over fist. they're the major carrier without the iphone. it's clearly important for each of the carriers. that includes verizon, at&t and

sprint. >> it's four months, will, since we learned sprint made this $20 billion bet to buy iphones over the course of the next four years. of course, the market was really surprised that they'd effectively signed that contract. is sprint marked out on its own in that respect or is verizon exactly the same do we think? are they all basically under the same sort of contracts with apple? >> well, that's a good question. the details of none of those contracts have actually been divulged. sprint did provide a bit more financial disclosure around that. i think all of them at some level have, again, some level of, you know, volume commitments. i think that probably is one of the concerns being reflected in sprint's stock today. they sold 1.8 million iphones, a bit below our expectations. one of the street's concerns could be can they ultimately meet those commitments. but i think in general, you know, they've all made commitments to apple. the growth remains strong for each of them. >> forgive me. i'm a student of these things. i want at a super bowl party on

sunday. people were talking with great enthusiasm about the samsung galaxy 2s i think it was. in a way i've only ever before heard people speak about the iphone. how much of a threat is that? >> you look across the channel of companies. samsung has become the clear number two competitor, we think, to the iphone. many of the other competitors, obviously, notably, ram, nokia and others have really fallen by the wayside. samsung does have nice products. i think that said, i look at the usability, the ease of use, overall ecosystem that apple has built. i think they're clearly still in the pull position. you've got to keep an eye on competitors. consumer electronics is viciously competitive over time. >> will, great to speak with you. thanks for your time. will power. rick santorum turning in three big wins yesterday. but let's bring in eamon javers. he has more on who the real winner is. eamon? >> good morning, guys.

well, the big question after last night is was the real winner of last night's caucuses here at 1600 pennsylvania avenue, barack obama? heading into a general election against a republican opponent, perhaps mitt romney if he emerges from this gop field, who doesn't have the kind of support that we thought earlier in the year he might have. the big winner, of course, last night on the republican side was rick santorum, sweeping minnesota and also two other states across the board. that's something that we did not expect to see from rick santorum. but does it indicate that, in fact, mitt romney has kind of a tepid support among the republican party faithful that might lead to an enthusiasm gap going into the general election? guys, that's what the obama machine in chicago and here in washington is really hoping right now. >> all right. eamon, we've got super tuesday coming up pretty soon, right? >> reporter: yeah. super tuesday coming up in early march. the romney campaign is putting out spin this morning saying, wait a second. we didn't really contest all

these states as aggress ily as we might have. we're focussed on super tuesday. we've got a batch of states nationwide we're going to contest. we're going to spepd a lot of money. they think the delegate math is very much on their side and they're going to get this thing and republicans will coalesce around the nominee. >> all right. eamon javers, thank you. here's what is coming up next -- ♪ you want to have a meal without a big deal, what are you gonna pick, hot pockets ♪ >> we've got hot pockets. not exactly those. we'll be checking in on casual dining stocks at all-time highs when "squawk on the street" returns. ♪ [ male announcer ] offering four distinct driving modes

and lexus' dynamic handling, the next generation of lexus will not be contained. the all-new 2013 lexus gs. there's no going back. ♪ take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up $600 when you open an account.

stocks to watch about 45 minutes into trading. pets coffee. bank of america the leading dow in the stock. shares up more than 40% this year. let's look at where we stand in the markets. what's interesting the rise in oil prices. we're up near $100 a barrel. this is certainly different -- actually, gold has turned around as well this hour. it was trading lower earlier. certainly watching that. here we are. incremental gains -- >> gas prices, we were talking earlier, nearing $4 a gallon. yet consumer seems to be

relatively strong, at least judging from the strength in some earnings we've seen from consumer related companies. >> you would think this would be something that people would be worried about. >> later in the program -- in this hour, we're going to talk as well about the strength of the manufacturing sector in america and the degree to which some of those automotive makers are increasingly investing to export around the world. be they german, be they french, italian. that'll also be quite interesting. i think phil lebeau has some great new figures on that. all right. talking about the consumer, as the market heads higher this morning ever so slightly we're continuing our search for -- wait for it. ♪ what are you gonna pick, hot pockets ♪ >> hot pockets, or, in other words, sectors that are on a tear. today's focus, casual dining stocks. mcdonald's up more than 37% in the last year, reporting a january same store sales increase of 6.7% this morning. other stocks such as panera, chipotle reaching 52-week highs. should you be adding these names

now to your portfolio or is the run over? jeff bernsteen, senior analyst at barclays capital. jeff, let's just start there. these stocks have all had very significant runs. do they have more to go? >> i believe they do. when you look at 2012 relative to 2011, we enter '12 with stronger sales, easing commodity inflation and more menu pricing to protect margins. the outlook going into '12 is looking pretty strong. >> why not the concern over rising gasoline prices and what that's going to do to the consumer and their willingness to spend money in these places? >> eating out is clear lly discretionary in nature. we don't want to discount the rising gas prices and inflation across the broader spectrum. the consumer has seen that before. we've seen an adjustment to it. it doesn't seem to be having as much of an impact as it did the first go-round a couple years ago when it really did spike. it seems more manageable for consumer this time around. >> mcdonald's certainly had a nice run. just off its 52-week high.

much better than expected january same store sales across all geographies. what is the comparable metric you would use for the price to earnings for mcdonald's? >> very strong result this morning. slightly ahead of the guidance they preannounced. all news slightly ahead of expectation. on a multiple basis trading about 17.5 times 2012 earnings which is the upper end of its recent ranges. but i think people are paying a premium now for the consistency and the global diversification and kind of the stability. in a tough environment they did very well. in an improving macro they're still doing well. people view it as very defensive in nature and are willing to pay a little more than they historically would have. >> don't you have a neutral on the sector overall? >> we have a neutral on the overall restaurant sector. we cover both casual dining and quick service. oftentimes you can be more preferential for one over the other. it's tough to have a bullish view on the entire industry. >> can you walk us through those names and explain into which

category they would fit for the viewers? >> quick service is more do fencive in nature. performs better during a downturn as it did last year. as we look to 2012 we think you'll see a trade throughout the year out of quick service and more into the more discretionary. whether it be casual dining or whether it be kind of the fast casual names you mentioned. >> basically i think what simon's asking, these are -- these are typically the quick service, lower price menu items. take it out or there's no table service, for instance, as opposed to a casual dining like a darden where you actually sit down, higher price menu items, et cetera? >> yeah. improving macro, i think the latter. specialty concepts are going to do better. whether it be a drinka or darden or the strong results from buffalo wild wings or chipotle, i think those names will outperform fast food in 2012. >> is mcdonald's the top pick there? because it is the bluest of the blue chips at the moment. >> absolutely. within quick service we think mcdonald's remains the most defensive and a strong performer. i don't think mcdonald's is

going to be our best performer in 2012. i think people will go for the growthier names, more discretionary in nature. >> if the company really picks back up, mcdonald's is essentially a defensive play for a lot of people. it's the dividend play. it's a play that is -- that a lot of people have clearly moved into. if the market does recover and people get more into cyclical positions will that not suck money out of mcdonald's? >> that's a definite possibility. when you see people look to trade more beta, you would see some people ease on their position in mcdonald's and go after the more discretionary. with that said, mcdonald's is a safe name to hold in your portfolio. you could balance it with more growth. >> when you say growth, jeff, i notice you have an overweight rating on wendy's. very much a turnaround story. are you looking for the addition of breakfast items on their menu as being a real catalyst for this stock this year? >> probably not this year. breakfast roll out is taking longer than people had initially anticipated and probably for the right reasons.

but it's probably not a big contributor until at least 2013. >> but it's still an overweight? >> it's an overweight. mcdonald's is the more defensive play. wendy's is a little more ri risk/reward on a turnaround story. still to come on the program, breaking news on oil inventories in about 12 minutes. bacon milkshakes. stick around. you won't believe your eyes. later on "squawk on the street," bacon is not just for breakfast anymore. now it's for your shake. yes, a bacon milkshake. our jane wells heads to jack in the box to find out more. all that and more when we return.

are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. in america, we believe in a future

that is better than today. since 1894, ameriprise financial has been working hard for their clients' futures. never taking a bailout. helping generations achieve dreams. buy homes. put their kids through college. retire how they want to. ameriprise. the strength of america's largest financial planning company. the heart of 10,000 advisors working with you, one-to-one. together, for your future. ♪ the two trains and a bus to the 5:00 arider.holar. the "i'll sleep when it's done" academic. for 80 years, we've been inspired by you. and we've been honored to walk with you to help you get where you want to be.

♪ because your moment is now. let nothing stand in your way. learn more at keller.edu. ♪

the euro holding its recent gains, now trading at its highest level in two months as we await news out of greece and clarification if the ecb is going to take writedowns in what form. neil curry joins us from bank of america at merrill lynch. good morning. i see you're up beat on the euro. you would be adding on positions here. >> very much so, simon. >> why? >> there are a couple reasons why i think the euro is going to be headed higher in the near term. first and foremost, if you look at the price action in european financial markets both from the perspective of european -- to the rather impressive performance in european bank stocks over the past several

sessions. in fact, we've seen a multimonth base complete in the european bank stocks, which suggests that we're going to see further upside there over the course of the next several weeks. which is clearly euro supportive. >> well, it's an interesting situation to be in. because we are, of course, with the ecb, they've already pumped half a trillion euros into the banking sector. they could pump another half a trillion at the end of the month. if this was -- if we were talking about the united states and qe, for want of a better expression, you guys would be obsessing about a dollar that would trade lower. why do you not argue with that sort of money coming or being printed by the ecb that should actually be euro negative because of the stability? >> i think over the longer term it's probably likely to be very much euro negative. more on a shorter term basis, you're seeing a significant shift in sentiment. which is one from a negative euro price action to one that's much more constructive. investors who are heavily short, as you can see by a lot of the positioning metrics, have to rethink their immediate thesis. some of that positioning, some of that short positions on the

euro are going to need to be unwound. that's going to help push the euro higher. you have bigger picture qe is clearly euro negative. over the course of the next several weeks or so, it's going to be more of a con constructive thing as people take a step back and say, you know what? we've stepped back from the brink of it. >> what's the trade? >> a little pullback. 1.3205. our stops about 1.30, 1.65. a move up to 1.36, 1.37 before all is said and done. >> just before we leave you, have you seen these reports from a chinese academic that i know have done the rounds on some trading stations, shortly beijing -- 100 million euros to shore up the -- >> i have not seen that particular story. those rumors have made the rounds really since september,

october of last year. >> they've not amounted to anything, have they? the chinese say we might help them. ultimately they don't actually put their money where their mouths are. >> whether or not they do or don't, i think, is a little bit besides the point. there are other factors which i think are helping to drive the euro higher, two of which i just pointed out with respect to european financial markets and the positioning. also, i think one other thing worth pointing out is the fact if you look at energy prices, energy prices are starting to make a significant move to the topside. commodities in general. if you look at the crb, if you look at the s&p, gsci, those indexes are trying to resume their bull trends which began back in 2008, q-1 2009. if brent can resume its bull trend, that in turn is going to be euro positive as well. >> mcneil curry joining us from bank of america merrill lynch. for more currency trade be sure

to catch "money in motion: currency trading" fridays 5:30 p.m. eastern with melissa. as we head to break, take a listen to clint eastwood's much hyped chrysler super bowl commercial, praising the comeback of detroit. coming up next, we uncover new data that just might back clint's claim. take a listen. back in two. >> detroit's showing us it can be done. and what's true about them is true about all of us. this country can't be knocked out with one punch. we get right back up again. and when we do, the world's going to hear the roar of our engines. [ tom ] we invented the turbine business right here in schenectady.

without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights. [ brad ] at ge we build turbines that power the world. they go into power plants which take some form of energy, harness it, and turn it into more efficient electricity. [ ron ] when i was a kid i wanted to work with my hands, that was my thing. i really enjoy building turbines. it's nice to know that what you're building is gonna do something for the world. when people think of ge, they typically don't think about beer. a lot of people may not realize that the power needed to keep their budweiser cold and even to make their beer

comes from turbines made right here. wait, so you guys make the beer? no, we make the power that makes the beer. so without you there'd be no bud? that's right. well, we like you. [ laughter ] ♪

here are the stories we are skauking about. computer sciences corp. leading stocks today. shares up more than 20%. the company also posting numbers this morning that beat estimates and named a new ceo. that's why the stock is up. 3m has a new ceo coming in as well. from coo to ceo. that will be effective february 24th. 2012 starts the year with a high rate of ceo turnover. 123 chief executive officers left their posts last month. that is the highest rate in almost two years. >> the market is fairly flat so far this wednesday. this is where we stand.

of course, great gains. year to date the nasdaq up almost 12%, for example. look agent the breadth of the move today, i imagine it's relatively evenly spaced. actually not. 2-1 advance decline. over at the nasdaq, wow, look at that. exactly the same. >> what's interesting to note, too, want to go to sharon epperson with some eia inventory data. >> actually, i'm in for sharon today. the number very interesting. last night from the industry we got a very big draw when it came to oil. today we've got really a very small build in terms of crude of about 300,000 barrels. that's well below the expectation of about 2.7 -- or about 2.5 million, let's call it, that a number of analysts had been looking for in te. in terms of the gasoline, we did have a build more in line with expectations of about 1.6 million. right now crude coming off a

little bit. still, it is holding in there at $99. that smaller than expected bill quite likely because we've seen some import numbers. over the last few weeks, imports were growing. refinely utilization was also fairly flat. refinery utilization went up about 1% here. that's a huge move. so that may have helped in terms of the drawdown. what's very interesting, a lot of traders are also talking about the backdrop that we continue to have here that is likely to be supportive of oil prices of the saber rattling between iran and the u.s. with the iranian ambassador in moscow today saying that if they were attacked by israel or the u.s., that iran could retaliate on u.s. targets. so that saber rattling is likely going to keep a little bit of a bid here, guys. nat gas today turning positive with an expected cold snap in the midwest where they use an awful lot of nat gas for heating. over to you. >> thank you, bertha. before we went to break, we showed you clint eastwood's super bowl pitch for chrysler.

today we've got some strong new data out that may justify clint's praise for detroit's comeback. cnbc's phil lebeau is in chicago. he has the latest on an auto sector story with big implications, phil, that may be underappreciated. >> i think very underappreciated. david, did you know that we are currently on pace to set a record when it comes to vehicles exported from this country? take a look at the numbers compiled by iho's automotive for us. this year we're expected to export 1.65 million weeks from the u.s. by 2015, more than 2 million vehicles. where are they going? look at the top five. it might surprise people. first of all, look at china. it is the number three export country in terms of vehicle value. 144,670 going there in 2011. what do they want? classic american brands. cadillac cts built in michigan. jeep grand cherokee. another vehicle very popular in china.

in saudi arabia, it's number four in terms of exports. they want luxury suvs, the ones built in south carolina and alabama by bmw and mercedes. finally, when you take a look at mexico and latin america, the full portfolio, anything that we get here, they get down there. you're looking at the ford focus, chevy cruz, those are in demand. why are our assembly plants so red hot right now? it has to do with us having lower labor costs much more competitive after everything was reworked the last couple years, and we're on a level platform. 16 plants now run three shifts a day. in 2008, there was only one plant that had three shifts a day. of course, currency plays a big role in making the economics of exporting work. just look at what's going on with the yen. this is why the japanese automakers, guys, they're shifting production over here to the united states. a lot of that to meet demand here. but also to meet demand in other countries. if you look at the list, guys,

of other countries where we're shipping to, it'll surprise you. they're places like nigeria where sales are up 35%. that would surprise people. >> saudi arabia and nigeria, of course, oil based economies. that's got to be one of the most positive single stories i've heard in a long time for manufacturing. >> surprising, too. people wouldn't imagine that. >> let's learn the lesson here, phil. because there are lessons to learn. you mentioned the jeep. when it was announced they were pumping $1.7 billion in for the jeep liberty, they said it was they were able to do something which had never happened before. to exploit the jeep internationally. >> correct. >> we are correcting -- okay. bmw and daimler have been pumping money in for different reasons. for a long time america did not make the most of what it had around the world. oddly it is taking europeans to a certain extent to lead the way here. >> absolutely.

we're playing cas ining catch-u. look at chevy. look at sales of chevy around the world. that's the shift we're seeing that detroit has made. >> thank god for those europeans, simon. thank you. >> i say it every day when i wake up. >> that we you referred to they couldn't figure out, we as in americans or we as in us europeans. >> very complicated. >> it is. >> let's bring in dave boblits, former chairman of general motors and a cnbc contributor. >> it's much like phil lebeau says. i think he said it all. the exchange rate shift had a lot to do with it because in prior decades when the yen was 1.20, 1.30 our manufacturing was hopelessly uncompetitive. now i would say the playing field for the first time is level. the second is perhaps, and even the most important thing is that detroit learned the lesson of --

all three car companies are now -- [ audio problem ]. >> we're having difficulty with your line. we have a really bad line. we'll take a break and we'll attempt to call you back. stay with us if you would. melissa. meantime, coming up, the market collapse of natural gas long term in nature? one of the sector's hottest players breaks it all down for us, straight ahead.

before the break we were talking about the great exports prospects we now have for the u.s. automotive industry. on the phone we were joined by the former vice chairman of general motors, rob lutz. we had a problem with his line. we he rejoins us now. you were suggesting that this was to do with exchange rates, mr. lutz. >> yeah. i think phil lebeau said it all.

the exchange rates have gone from being hugely in our disfavor to now absolutely levelsi leveling the playing field. we also during the restructuring got a lower labor cost, got rid of some almost intractable what we call legacy costs of billions of dollars a year. so i think for the first time, the american automobile industry is fully competitive. >> it's obviously going to make a contribution to president obama's goal of doubling exports during his tenure. can he take the credit for what we're seeing? >> what the kr-- with the -- >> can obama take the credit for the figures on the screen now? >> yes and no. the automotive bailout and the realization something had to be done to save the automobile industry after the '08 meltdown really started with president george bush. it was handed off. the obama administration completed the restructuring.

and that was very, very skillfully done. and i would say, yes, the resuscitation of the american automobile industry has to go -- like him or not, that has to go down as a significant achievement of the administration. >> we'll leave it there, sir. thank you for your time. robert lutz on a crystal clear line there. former vice chairman of general motors. ceasars entertainment is starting to trade. that tiny, tiny, i can't emphasize enough how small this offering was. sima? >> we're watching ceasars. the stock which was priced at $9 a share started just trading here at the nasdaq under the symbol czr. keep in mind, this is a very small offering as you mentioned. it's ceasars second attempt. the first was back in 2010. they will face a series of critics who say their valuation is too aggressive. they incurred high debt. the casino industry is very highly dependent on the u.s. economic recovery.

lastly, they lack that exposure to macao, the asia hot spot for gambling. there's just a couple of concerns as some of the people i was speaking to this morning told me. right now up 6.8%. sending it back over to you. >> kayla tausche has more on this interesting offering to say the least. >> you and i have both looked into this. a lot of people i've spoken to who are familiar with this transaction, even though we might have thought it was headed straight south because of the ability to a lot of co-investors to sell their shares, remember when there's a tiny amount of float that means oftentimes it's engineered to go higher. some of the people very familiar with the transaction said there's no viz ability to see how it's going to trade. it could go sharply up or sharply down. they just didn't know. it will be interesting as you see some of this volume coming back into the market, where the stock goes. whether it middles out, staying on the up or actually goes down. you have 1.8 million shares that are actually going public. but you have 11 million shares that are actually eligible to

sell right now. clumps of 33 disparate co-investors who actually can sell their shares now. the biggest clump of those, goldman sachs has about 20 affiliate entities who hold these shares. one of the biggest eligible sellers here is actually calter's, the california pension fund. that is definitely something we're watching. all of these people eligible to sell here. where the stock actually goes. you can see how it's up more than #11% edding straigh inhead. the main aim by both the underwriters and the sponsors was just to get this out the door, just to get some liquidity for the co-investors, for the company to get some sort of currency and then to let them see how they were going to exercise some of these shares going forward. obviously, this has been an attempt at an ipo for several years now. >> right. >> very debt laden, david, as you've been talking about. >> i can't emphasize enough for our viewers as well how incredibly small this offering

is and what we're talking about here. a $13 million offering essentially. think about facebook coming with -- how large that will be. >> 2.5 billion shares is what people are estimates right now. >> facebook in total. >> facebook in total. >> this has 125 million outstanding in total. also $22.5 billion worth of debt coming from the 2006-2007 leverage buyout led by apollo and tpg. paulson can sell some of their stake. >> they can sell. when we talk about caesars we refer to the attempted ipo in november 2010 when they were seeking to raise north of $500 million. obviously a huge sum compared to what they were actually able to raise today. they also, remember, updated their prospectus in november of last year with a valuation -- implied valuation of around

5-ish billion. with the valuation coming down to $1.25 billion -- >> the idea -- this is absurd. i have to say. this is why jim cramer and i were talking earlier, wondering what the sec was really thinking in allowing that small of offering to go out there. we're talking about it. that's obviously helping it. but that's ridiculous. you cannot argue that price is necessarily indicative of the value of caesars. >> there is a subjectivity the sec has used in the past. when it said to goldman your offering of facebook shares is now so public -- goldman had to take it abroad. the sec got in the way on a subjective view of what a public transaction would be. can't they in the same way come back on this and say, actually, this is too small? >> they didn't. they allowed it to happen. it's out there. they had their opportunity to review it. it's out there. it's now held. again, we're talking about it. what i would encourage people to do if they have interest in caesars entertainment, it is an enormous gaming company without

that exposure to macao. read the s-1. go to sec.gov. pull up the s-1. try to understand what's going on with the company. it's all about debt and a very small market cap despite what is a move up of 42% in that market value. >> we were talking about an analyst yesterday at the offering price of 9. similarly valued to a wyn, lvs. >> without that macao exposure. >> without the macao exposure and with an overhang. millions of shares that can come to market any moment. >> a lot of people are also talking about this favorable opinion of the doj in online gaming. caesars does have exposure there. you wonder if it's enough to canceling out the macao exposure. a lot of people are saying it probably isn't. as far as the way that this deal was structured, remember, you're trading on the nasdaq. you only have 450 shareholders total. my sources are telling me that this was structured to just

barely push past that limit. >> yeah. all right. i mean, you know, 42,000. this is an enormous company. enormous amount of debt. extraordinarily small amount of stock. kayla, thank you. >> it has held 42.89% on the open. you've heard of combining milk and cookies. bacon and eggs. mashed potatoes and gravy. i bet you haven't heard of mixing bacon with your milkshake. cnbc's jane wells has more before we head to break. >> melissa, folks, do you love bacon? how much? do you love it this much? jack in the box takes bacon mania where no pig has gone before. we do a taste test after the break. [ male announcer ] how do you trade? with scottrader streaming quotes,

any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. weight loss programs can be expensive. so to save some money, i just got the popular girls from the local middle school to follow me around. ew. seriously? so gross. ew. seriously? that is so gross. ew. seriously? dude that is so totally gross. so gross...i know. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more.

♪ okay. here's a question for you. are you tired of having to make your own bacon milkshakes at home? >> oh, every day. what a pain! >> cnbc's jane wells is waiting -- >> never gets fine enough, does it? >> no, no. >> jane wells is live in

california with -- >> reporter: simon, i bet they don't have these back home, do they? jack in the box is betting the whole hog on your love of bacon, starting in this regional ad during the super bowl -- >> mom, i'm getting married. >> who's the girl? >> it's not a girl. it's bacon. >> reporter: the chain has launched a "marry bacon" campaign for its blt burger with the tag line "you may eat the bride." there's even a bacon milkshake in limited supplies. mr. box tells us it's not really bacon but a flavored syrup in the shakes. one local manager told me they're selling a lot of them. she said, not my thing but i subjected the public to a tasting. this is a bacon milkshake. >> oh! >> reporter: don't not it till you've tried it. >> i'm scared.

>> tastes like bacon. >> reporter: is that a good thing? >> not for a milkshake. >> no, i don't like it. >> reporter: you don't like it? you're still drinking it. >> it's bacon. >> it's bacon? >> it's missing something. >> to me, it just tastes like bacon. it's like i'm 90 years old and i have to drink my food. >> i love bacon. but i never thought i'd like it cold. but it's really good. >> reporter: does it taste like bacon? >> a little bit. >> oh, yeah -- but i like anything sweet. >> that is pretty good. >> reporter: that's horrible. >> did it not taste like bacon? >> no. oh, my god. how did you do this? >> it's good, can i have it?

>> reporter: yeah. that's really not good. that's really not good. i love bacon and i love shakes. but they should not breed. this is the mule of the food world. it tastes to me like a really, really sweet syrupy shake with a smoke wi, weird aftertaste. >> what color is it? >> reporter: it's yellowish. >> yellow. does it look like -- when it's cold, does it look like frozen yogurt or a up the of lard? >> reporter: it is so bad. there's a few people in the bureau who actually like it. it is so sweet with this weird smoky flavor and it's cold. >> is it smooth or does it have bacon pulp in it? >> bits! >> reporter: no, no, it's smooth, like a regular milkshake. and once again, there's not really bacon in it. >> it's essence of bacon, essentially? >> where do you get that from? >> how do they do that?

that was a good question that that lady asked. oh, man. >> reporter: it's magic. >> that other guy was looking for something else. it needs eggs. >> reporter: the first guy i gave it to, i have to tell you, i saw him later in the mall, he drank the whole thing. >> do we know fat content? is it higher than a normal milkshake or not? >> reporter: i didn't go on the nutritional site. jack in the box has it on the nutritional site. i was afraid to look. but if you're buying a milkshake in the first place, you're not really looking at that. >> okay. thanks, jane. >> getting over the thought of it. >> i like the sweet and salty. it's a nice combination. >> but this is fat and fat. this is milk fat and bacon fat together. >> right. jane is a taste maker. if she didn't like it, i don't like it. that's it.

street time, and the ipad battle rages on. a chinese company saying it was using the name ipad long before apple was. this so-called company is suing apple for 1:6 billion for trademark infringement. we've asked you, if apple had to change the name of the ipad, what would they change it to? tweet us. our handle is @cnbcsquawkstreet. >> we just did the research. it has 40 grams of fat. and vanilla ice cream milkshake of the same size has 38 grams of fat. additional two grams for the essence of bacon. but when year up in that territory, does two grams really matter? probably does not. before we head to break -- >> as if a bacon milkshake wasn't disgusting enough, here's

a list of bacon products to really trouble your tummy. the six degrees of bacon. number six, bacon martinis. number five, bacon floss. number four, bacon cologne. number three, chocolate-covered bacon. number two, bacon jam. and the number one degree of bacon, bacon soap. ♪ oh! [ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too. liberty mutual insurance. responsibility. what's your policy? ♪ amen, omen [ kareem ] i was fascinated by balsa wood airplanes

since i was a kid. [ mike ] i always wondered how did an airplane get in the air. at ge aviation, we build jet engines. we lift people up off the ground to 35 thousand feet. these engines are built by hand with very precise assembly techniques. [ mike ] it's gonna fly people around the world. safely and better than it's ever done before. it would be a real treat to hear this monster fire up. [ jaronda ] i think a lot of people, when they look at a jet engine, they see a big hunk of metal. but when i look at it, i see seth, mark, tom, and people like that who work on engines every day. [ tom ] i would love to see this thing fly. [ kareem ] it's a dream, honestly. there it is. oh, wow. that's so cool! yeah, that was awesome! [ cheering ] [ tom ] i wanna see that again. ♪ hyundai genesis.

in a new, faster-acting formula. zero-to-sixty in less time than a porsche panamera s. the 429 horsepower genesis r-spec. from hyundai. sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business.

let's get to it. time for "squawk on the tweet." a chinese company says it was using the name ipad long before apple. now they're suing apple for $1.6 billion for trademark infringement. we're asking you, if apple ever had to change the name of the ipad, what should they change it to? >> anthony tweets, the i-top, the ipad version of the laptop. and then ethan tweets, it should just be a symbol like prince. we're all going to call it the ipad anyway. that's a very good point. >> can't you just call it the ipad tablet? >> it's too long.

it's always going to be an ipad, isn't it, guys? >> before i take my leave, what's coming up on "fast money" tonight at 5:00? >> we're on the conference calls for a lot of the earnings reporting after the close including cicso and whole foods. guys, great having you. third hour of "squawk on the street" starts right now. welcome to hour three of "squawk on the street." here's what's happening so far. >> had we focused on the economy, not spent the efforts on all these diverse goals, i think we'd be in much better economic condition today. >> this is a stock that has been hitting a new high almost every week. it's been trading basically at an all-time high here. it's the juggernaut that is mcdonald's. >> if we go get the data on publicly traded companies around the world, you observe exactly the same pattern of accumulating cash on their balance sheet and

great uncertainty about demand and about financial prices in virtually all the developed worlds. >> these numbers are the kind of numbers that you would expect from a very young chain, not have a mature chain. well done, mcdonald's. >> for them, they have to get through the first half of this year. they're talking about a u-turn in terms of margins and that '13 will bring better things. you're hearing the opening bells. the s&p 500, the cnbc realtime exchange. >> we feel bullish for apple despite the run. our judgment remains compelling, trading at around 11 times. >> eating out is clearly discretionary in nature. we don't want to dismiss the rise in gas prices and the inflation that we're seeing across the broader spectrum. with that said, the consumer has seen it before. we've seen an adjustment to it. it doesn't seem to be having as much of an impact as it did the first go-round a few years ago

when it really did spike. >> a mixed picture for the market on this wednesday morning. the dow coming off its 3 1/2-year highs. right now, trading lower by 10.5 points. the s&p 500 tacking on about 1.5 points. and the nasdaq, certainly being helped by apple in its fresh record high this morning, 2,907. up about .1%. caesars debuting at the nasdaq day. the stock up more than 25% at this hour. it is the battle of the cell carriers versus apple. apple hits another record high. sprint falls more than 5% thanks to the higher cost of selling the iphone. it's the hottest stock in the s&p so far this year. is there any more upside left in netflix. plus, new speculation about a possible apple television. what kind of gains could such a product mean for apple's stocks and earnings? and we're less than half an hour

away from the european close. is it time to get bullish on the overseas markets. and the collapse of natural gas, the commodity that's fallen 30% in the last two months alone shows no signs of stopping. one of the sector's biggest players tells us how to trade it. we've got to start with "squawk on the beat." a bill took on a contentious and partisan edge with big names like nancy pelosi and eric cantor under attack. eamon javers is live in washington with the story. eamon? >> reporter: good morning, melissa. the bill goes before the rules committee today. it's expected to be on the house floor tomorrow. and this is a bill that is getting stronger and stronger as it goes through the congressional process. take a look at what's in this version of the stock act as of right now. you get a sense of where we're headed with this. this covers the executive branch, not just members of congress but also members of the administration. it includes a provision that

says convicted members of congress can't collect taxpayer-paid-for pensions. and it says members of congress, the administration and their staff will be blocked from special access to ipos. that's not going to be retroactive but would apply in the future. there's a provision thould block freddie and fannie executives from getting bonuses. that's an interesting one that began on the senate side that's in this bill. one thing it would not do, however, is it would not require those so-called political intelligence firms to register -- those are the firms that mind capitol hill for intel and sell it to investors for investing edge. those firms resisted that provision. the bill on the house side would call for a study looking at that. for now, they've escaped major scrutiny. >> eamon, thanks for staying on top of the story for us. we want to check the capital markets under gary kaminsky. he's been watching the caesars stock. how can this be up at this

point? >> let's get to that. i want to give eamon a great shoutout on that report. he was so early on that story as well as jon fortt. great work by eamon. caesars, you and david were talking about it earlier. this is the dumbest thing i've ever seen, let's call it what it is. 1.4% of the company has floated 1.8 million shares. they printed almost 2.5 million shares already. stock's up 25%. if, in fact, you had that type of demand -- look at that. it's up 38%. if this is not shades of what we saw in 1999, then i don't know what is. to basically float 1.4% of the company -- do investors buying the stock right now or traders realize that essentially 19% of the flow, of the total company's capitalization is free for sale by private equity firms as david alluded to. read the s-1. another 10% by hedge funds.

i don't know who's buying the stock. i don't know if it's traded among a handful of traders trying to drive this. but it's the dumbest thing i've ever seen. >> how can this have no lock-up period whatsoever? >> you can do whatever you want. you have to disclose it and tell those participating in the ipo that these are the restrictions. the attempt was to get a public market so those who wanted to try to participate in this action could. it's all disclosed. i don't think that's buying it right now have read the s-1. >> and buy erer beware if you dt read the s-1. caesars has no macau exposure and they have this overhang. >> nobody from the lbo buyers are going to tell me they think this is crazy. but i assure you, they think it is. you mentioned that nat gas story, rob raymond is here in the studio.

you have to listen to him talk about the value of the equities of these companies given where that nat gas is. that's about as dumb in some cases as what we see with caesars today. >> dumb is the word of the day. let's get to the cme group. rick santelli is here with the "santelli exchange." >> this morning, sam zell was on with becky talking about housing. listen to this little exchange. run the tape, please. >> if our banking system didn't work, the calamity is almost immeasurable. so to try and equate coming in and in effect protecting the banking system with protecting the housing market is apples and oranges. >> but you understand the political spin and the way it takes off -- >> you asked me not a political question. you asked me an economic question. >> you're right. >> i'm answering it on an economic basis. >> you know, as i listen to

that, two things jump out at me. first of all, so many really negative things seem to happen in election years. maybe negative is the wrong word. but not a lot of homework. a big sell for a lot of issues that really don't come to pass. think about the baton passing between bush administration and the obama administration. think t.a.r.p., think about how all of that happened around the time of the election and how it was such a strange phenomenon. also we talked a lot about moral hazard. listen, if you could walk away from your house, what's the point of thinking people are going to have some self-responsibility? now, take that to the next issue, credit. yesterday, we learned that the credit numbers for december jumped consumer credit. particularly non-revolving, which includes things like student loans and auto loans. now think moral hazard. what did the government do in july of 2010? they basically started issuing 100% guaranteed student loans.

what has happened? this fall tuition at public education has increased over 8%. you see the way this spiral occurs. many of the press reports written say, oh, this consumer credit expansion of historic proportions in november and december is a good thing, things are getting healthier. going into debt is not a healthier endeavor. i would rather see a student have a part-time job, use his parents' savings and pay instead of going into hock. and we call ate good thing? there's something wrong when the strategy is to put people in debt and that's the solution. back to you. >> rick santelli, thanks for that. let's talk netflix, flying high this year, the top-performing s&p stock so far this year. up about 85%. so the question is, is netflix too hot to handle it? jason helmstein has an outperform rating on netflix. he joins me. and andy hargrave with pacific crest securities.

he is cautious on netflix saying the stock has begun to price in aggressive expectations. guys, great to have you both with us. i know this is going to be a heated debate. i encourage you to talk directly to one another. jason, it seems like there's more and more news about content partnerships, more and more people entering the streaming space with the verizon coinstar deal, for instance. isn't that going to pose a competitive challenge here? >> you have to look at the economics. the reality is the studios can't sell dvds anymore. this is their stream now. it's all about the business model. if you look at the amount of money that netflix is collecting and the amount of money that they can pay out, if they can pay out a higher amount of money than anybody else, they can have a better library and a better consumer experience. it's interesting when you look at that coinstar/verizon release, there were no details. what is it going to cost, what is the content available? the reality is they don't know. they have to have the conversation with the studios.

amazon will admit that they know they can't have a service comparable to netflix unless they charge money. but they don't want to charge money. they want it to be an add-on to a prime membership. >> but amazon generates so much money in other parts of the business that it can bank-roll a streaming business to the point where netflix could be outspent. its content is going to be driven by who can pay what for content. amazon has the cash and netflix may not necessarily. >> if you look at the amazon income statement, they can't spend $1.5 billion. if they did, over the next 12 months, amazon would have no profitability. and we talk about the company having 1% or 2% margins, to basically go to the street and say, we're going to make no money because we want to participate in a very small part of the business doesn't make sense for amazon to be that aggressive. >> andy, jason makes a lot of good points. he also points out that subscriber losses have lessened

and stabilized in the last quarter. that may be a reason why amazon can continue at this point to run. at the same time, do you believe that netflix is its own worst enemy or is it really the competitors coming on to the scene that pose the greatest challenge? >> i think actually the laws of just basic population might be netflix's worst enemy. i've made a lot of the points that jason has made in the past and i agree with most of them. the issue i have with increasing competition is not that amazon's going to be better than netflix. it's that amazon is probably going to be good enough for a lot of people. and verizon/coinstar might be good enough, and dish might be good enough. and what happens is you start to eat away at the tam. what do you think netflix needs to get to in the domestic market in terms of streaming subscribers to support the stock price? for me, it's a number that's roughly $45 million and no other premium service is anywhere close to that level. you're making a leap of faith right now.

>> we think the stock right now on u.s. earnings, we think will do about $5 this year, trading at 25 times. if they can get to something in the 30s and then you say kind of a high teens multiple, we think you can get the stock price 25% higher. >> but you have to admit that all those earnings are coming from the dvd business at this point. >> yeah, you look at -- they have a positive contribution margin on the streaming business. we think you will see more cost discipline over the next few years with what they spend for streaming content. that business will have a lot of operating leverage. >> we have to wrap this conversation. but, andy, on this last note, what is your price target for netflix? >> we don't have a price target. >> and you, jason? >> i believe we're at roughly around where the stock is, 1.30 on the stock right now. the stock is up dramatically. we reassess that each quarter. >> guys, great to have you both. we appreciate it. catch the bull/bear fight over groupon coming up in less than

an hour on the "fast money halftime report." apple has revolutioned computers, music and phones. what's next? many say television. next we look at what an apple tv could mean for this already seemingly unstoppable stock.

as apple hits new all-time

highs today, speculation continues to swirl around a potential apple tv. the latest, a hypothetical 42-inch tv selling for about 1,500 bucks that could be much more than a tv. what could an apple tv mean for the company and its investors? ben has looked into this. always great to speak with you. >> great to be here. >> i've been reading a lot of apple analyst reports of late. i think you're one of the most bullish when it comes to what this could actually mean in terms of revenue for apple. in profits you say $17 billion in profits, $5.40 a share in fiscal '13. that would be about 11% of your current eps estimates. >> right. >> to help us understand this very bullish forecast, why don't you walk us through what you think this i-tv will be and what sort of margins this product will have? >> we said in fy '13 we expect a

tv to come out. it translates into $5.40 on the bottom line. i don't think this is in anybody's models on the street the way it should be. it's not even in ours. it's a potential upside case. we think that an apple tv makes a lot of sense. but we think to call it a tv doesn't do apple justice. we think the tv can be much more. it's really a natural extension of their eco system. and we think it will will frankly be a hub that can connect to icloud and itunes where you can get content on demand. but your pictures, your own stuff on demand. and every ios device could be a remote controller and a gaming controller down the line. this device could do a lot of things. the real wild card is how they're going to work with cable companies and current content providers. >> how would it be a partner with, let's say, a netflix, for instance? >> netflix is pretty easy. you just kind of offer the service and like they do in apple tv.

but what's interesting is apple's a company that loved simplicity. and the current cable remotes are obviously something that we all don't love, at least me and most people i know. and it would seem like apple could make on app or have the cable companies make an app that turns the remote controls to something that could work on an ios device that would be more elegant. the big conflict is that the on-demand video is a big revenue source for these companies. and apple will have a conflict with itunes going up against the on-demand revenue for cable companies. be interesting to see how that will be tackled. nonetheless, this type of device which is really going to be a hub is a natural extension for apple. >> if it's $1,500, you say in your note that the margins and pricing could be industry leading. when it comes to margins, what does that mean? does it mean that the margins will be better than a conventional tv? those margins are pretty razor thin at this point. >> we think they would be better. apple has a unique ability to

not only get components cheaper than a lot of their competitors. but they have so much cash, they can invest in new capacity, which then creates self-deflation of their industry and do pre-buys of components which is pretty impressive. that's one of a kind. also tim cook is a master and his team as sourcing. i think with the iphone, when they were doing the phone, everybody said, oh, it's razor thin, look at all these cheap phones thaish phones, they're going to get killed. that wasn't the case. when you create a product with so many feature that is dovetail into your life and your other device, customers will pay for that value. apple has the ability to disrupt this sector, just like it did everything else. and everybody's going to say all the same stuff, they can't do it. and of course, they can. just look at phones. >> just to be clear, that 11% to eps is a potential upside. you don't have that in your estimate -- >> yeah, ben. but i don't have it in my

estimates officially. that's a potential upside. and it's a run-rate number. i'm not 100% when this is going to come out. buttic we'll hear about it and see it in fy '13. counting you down to the close in europe. markets are in the home stretch. about ten minutes to go. but first rick santelli is watching all the trades in chicago. we will take you there live right after this. we were just driving along, comin' back from the lake, and all of a sudden, ka-plam. it blindsided us. what is it? our college savings account. how do you think it happened? not sure. i think something we bought a while ago turned out to be something else, annnnnd, i remember a lot of other stuff in there had the word "aggressive" in it. is everyone okay? well, now, yeah. who knows later. ♪

all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.

welcome back to "squawk on the street." i have jim bianco, welcome, jim. you were writing some interesting research on central banks and all the accommodation and all the amounts of -- trillions of dollars that ended up on their balance sheets. give me a runthrough your piece. >> we all know about q.e. 1, q.e. 2, q.e. 3. but it's not just the fed. all the central banks are engaged in a massive expansion of their balance sheets. they've gone from $5 trillion of assets five years ago on their balance sheet to over $14 trillion of assets on their balance sheet. now, the size of the u.s.

economy, or about 30% the size of all world stock markets, a massive expansion of balance sheets. >> now, is it paid off? what was their goal and what did we get? >> suppressed interest rates was their goal. they created all this money to push interest rates down. that part has probably worked. push people out the curve to get them to buy riskier assets, that might have worked, too. but now that the stock market has gone up, are they spending that money, are they expanding their businesses because rates are up? not really. it's an overvaluation in the stock market. >> i hate to disagree with you. but it produced something else, it's produced huge amounts of consumer credit that we learned yesterday. what do you think of that? >> let's break down the consumer credit in the two sectors they don't broke them down that, the government-driven and the nongovernment-driven. >> which is flat and which isn't? going to the banks for loans isn't.

>> the bank title loans -- >> you have general motors auto loans going up. you have them taking over the financing of colleges and sallie mae issues, that's going up. in the end, when you squeeze the water balloon, the private side you wanted to pop out hasn't popped yet. it's not like my turkey in november. back to you. >> thank you, rick santelli. the trading day is almost done in europe. we have the close and the details on the impact in the united states right after the break. stay tuned. ♪ our machines help identify

early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter. if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that. [ jocelyn ] my name is jocelyn, and i'm a cancer survivor. [ mimi ] i had cancer. i have no evidence of disease now. [ erica ] i would love to meet the people that made the machines. i had such an amazing group of doctors and nurses, it would just make such a complete picture of why i'm sitting here today. ♪ [ herb ] from the moment we walked in the front door, just to see me -- not as a cancer patient, but as a person that had been helped by their work. i was just blown away. life's been good to me. i feel like one of the luckiest guys in the world. ♪

let's bring in simon hobbs as we count you down to the close in the uk and across continental europe. got about a minute to go, simon. >> and as we've seen, wall street come off, seeing towards the close that the european indices are diving deeper into the red. it may be a because reuters is reporting the ecb has not yet decided whether to contribute to the greek restructuring. i want to just break away if we can from thing any of what the greeks are doing and talk about the general environment in europe. i should mention commerce bank has indicated it's going to wind down it's troubled mortgage department. we're still down about 91%, 92% from where we were, say, five years ago. it's that five-year track that i want to demonstrate where we are. let's have a look at the credit conditions and those interbank lending rates in europe and see the way in which we've started

to come back down. you can see it also, of course, in the yields we have on the sovereign debt. let's get the close here. >> the european markets are closing now. >> so it's fairly spotty, as you can see around europe. let me come back to this optimism that when i call around europe, i get it repeatedly at the moment, there is a belief that actually come what may the greeks will get their money in march. those credit conditions have eased because of, i say it again, the half trillion euros the ecb has provided to the banks and in three weeks's time, again, the offer of unlimited money for three years at 1%. have a look at the yields on, for example, portugal and ireland. now, if greece kicks off and there is a disorderly default, no question we could have a problem again. and the spanish yields are not what we'd like them to be. but in this environment, look at the equity moves you've had and how people have stampeded into the quality names, certainly the

automotive makers in germany during the course of the year. bmw, daimler-chrysler, up there with 33%, 31% gains in just the last month and a bit. if you look at the top of the french market, societe generale is there, having been beaten down dramatically. but look at the automakers, renault and peugeot. it suggests to me that the sort of noises coming from the automotive celtics alone within the eurozone, which is 11% of gdp, might mean that if they actually carry through on selling the sort of volume that they're intending to produce, we may still avoid recession in europe. back to you. >> simon, i want to dovetail what is going on in europe at the close with what's going on here in the united states. we've seen a turn in the past half hour. >> this is exactly what we were talking about. it's draghi time. and draghi's got a problem.

the ecb meeting is tomorrow. and everyone was going to swamp draghi with questions about, okay, so now that we have a greek deal or supposed to have a greek deal, what's the ecb going to do? are you going to contribute, are you going to do a debt swap? what's going to happen? mr. draghi is very constrained. very difficult for him to make comments because we don't have a greek deal. he's not going to say, yeah, we'll do a lot for you white house knowing what the greek deal looks like. there were vague headlines floating around in the last 45 minutes that the ecb has not decided on whether they're going to actually participate. simon mentioned that. that's why the market dropped. it makes a lot of sense. mr. draghi has said, i'll talk about it when we see what the deal is. we don't have the deal. >> let's not get caught in the woods here. he cannot say categorically they're going to do this if they're still trying to hold the greek politicians' feet to the fire on working through that document -- >> that's my point. >> it's not necessarily a negative.

the indication is in private they've agreed to do this under a huge amount of pressure, even in the imf. let's assume it's going ahead. it's not necessarily the end of the world. we need to watch it. it is potentially serious if it gets kicked off. in europe, that's not what the investors are doing. that's my point. >> the market did get caught up in the headlines. the euro dropped, the dow and the s&p also dropped a little bit. not dramatically but it did move to the downside. and the vix moved up. you see the euro coming off its lows recently. a couple of other things. energy stocks dropped about an hour ago. we got the weekly inventory numbers. the energy stocks dropped there. and the inventories were a bit higher. they did rise. and oil dropped as well about the same time. there was a contributing factor here from the energy sector as we saw weakness there. finally, just a quick comment on the caesars thing. it's traded 4.5 billion shares. they floated 1.8 billion shares.

what this means is they have floated almost -- they have traded almost 300% of the float. in the last hour, since it began trade. it was halted once. look at the stock now. >> up 61%. >> after going public, $9 a share. remember, as you pointed out, they can sell -- secondary shareholders can sell 12 million shares at any moment. >> no lock-up on this one. >> it's interesting that they've used that opportunity when the underwriters essentially have to support the stock to get out quick. you don't think? >> well -- >> in minutes -- within an hour of it trading to get that volume is interesting, is it not? >> yes. it's a little strange that they're able to trade that much in such a short period of time. rather remarkable. want to check in with rick santelli in chicago. rick? >> here's what strikes me. an ex-trader, a market guy,

we've been talking about greece and some of these decisions and some of these intricacies of what the ecb would take some concessions. now that we're getting closer to interstabilization, the euro currency is virtually unchanged. the equity markets in france and the equity markets in germany are virtually flat. so the question i have as a trader is, how much is priced in, if that's the case of why we're not doing better? or maybe even better, maybe the market, many of the investors are seeing through some of this thinking about the next chapter, whether it's going to be issues with portugal or issues with spain or maybe even more importantly, ultimately, is debt inforgiveness going to be the foundation to build a better global economy? i like looking at the markets. this is not what i would thought on this day. back to you. >> thank you, rick santelli. want to bring in david kelly, chief market strategist at jpmorgan funds.

>> glad to be here. >> we are on the eve of a potential greek debt swap deal. what do you think the reaction in the markets would be? is it a sell on the news? >> it might be. maybe not immediately. the markets will be finally happy to see something signed here, particularly if we have ecb participation as we expect. but the bigger picture is that the greek economy is still in freefall here. you can have a government sign an agreement, but ultimately we're pushing these peripheral countries to such an extreme that the government itself may be overthrown. there are elections in greece this year. there's a question mark about the level of austerity being imposed upon greece. does that destabilize their whole society and therefore make any agreement someone suspect in the long run? >> it's interesting, david, in the notes that i have gotten before the interview, you say that investors are likely to stay relatively cautious. what's going on in europe is certainly certainly a contributing factor. but what's going on here in

terms of earnings growth relative to the stock market's climb since the beginning of the year, earnings growth for 2012 is not necessarily keeping pace with what it would need to be in order to sustain these market valuations at this point. do you think we're at a point where we need to pause in this move higher that we've seen in 12? >> i think markets may move more slowly from here. earnings have actually -- we think will be down for the fourth quarter from the third. that's the first time that's happened in three years. a sequential drop in earnings. we think the earnings will begin to rise in 2012. but there's the issue of iran, will we get through this year without israeli attack on iranian nuclear facilities? there are a lot of uncertainties out there. if you're in a dark room, you walk very slowly, one foot in front of the other. investors have this sort of nameless fear that something else is going to happen here. i think that's going to limit the pace of any market up move. >> at the same time, you do believe the u.s. economy is gradually improving.

are you defensive on the market with an upward bias? >> no, i'd still be positive on the market, long equities. but the reason i'm long equities is primarily because fixed income and cash are so expensive here. what's really out of whack in this economy is that long-term interest rates at about 2% on ten-year treasuries are just too low. i'd be overweight equities because i'm somewhat underweight fixed income. >> you like emerging markets. do you like energy, for instance? you mentioned political tensions in iran. that could push oil prices higher. would that be a good thing for that sector? >> i think you want to have some exposure that because of that specific risk. the thing about dwefriversecati most of the things in your portfolio are going to go down. but oil futures would go up. that's something to think about. >> david, always great to speak with you. >> sure. >> david kelly.

straight ahead, nat gas has seen a huge collapse over the past few months. has the bubble burst for good? one of the sector's biggest players weighs in. that is next. but first, take a look at the winners and losers from the trading day in europe. i look at her, and i just want to give her everything. yeah, you -- you know, everything can cost upwards of...[ whistles ] i did not want to think about that. relax, relax, relax. look at me, look at me. three words, dad -- e-trade financial consultants. so i can just go talk to 'em? just walk right in and talk to 'em. dude, those guys are pros. they'll hook you up with a solid plan. they'll -- wa-- wa-- wait a minute. bobby? bobby! what are you doing, man? i'm speed dating! [ male announcer ] get investing advice

for your family at e-trade. eeeeeee! whee! whee! wheeeeeeeee! ah heads up. wheeeeeeeeeeee! everything you love about geico, now mobile. download the new geico app today.

the two trains and a bus to the 5:00 arider.holar. the "i'll sleep when it's done" academic. for 80 years, we've been inspired by you. and we've been honored to walk with you to help you get where you want to be. ♪ because your moment is now. let nothing stand in your way. learn more at keller.edu. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future.

♪ coming up next on the "halftime report," groupon soars big. but is the stock too hot to handle? a bull and bear do battle on that issue. and is morgan stanley's monster run done. a top analyst thinks so. plus, we're taking positions on one of tech's biggest turnaround stories. that's just ahead on the "halftime report." now back to melissa and "squawk on the street." gasoline prices have been subtly climbing. nat gas prices in the midst. there's a surplus hurting the commodity's price. gary kaminsky has more on this story. gary? >> melissa, thank you very much. if viewers have listened to the advice of rob raymond in terms of nat gas, they have been very successful investing indeed. rob, let's get right to it. you had the call on nat gas. what do you see now for the next

several years? >> well, i guess to go back and level-set the conversation for a minute, our negative view on gas has been driven by the concept of disruptive technology. i think sort of the sign posts along the roast are that disruptive technology is alive and well. front month gas prices, future dates, three and five years out have all effectively collapsed at this point. in the near term, we think there's going to be a lot of additional pressure in the gas market through the course of the summer and into the fall. we wouldn't be surprised to see nat gas trading down to $1. worse from here. long term it sets up a consolidation in a rebound in the commodity price. but importantly to a world where prices are probably lower for much longer than people have historically thought they would be. >> importantly, in the capital structure of any company, there's equity, the stocks and then there's debt. i know when you look at the natural gas companies, it's very

important to look at the entire capital structure. we look at esco, natural gas producer. they essentially downgrade the debt. the equity has obviously suffered. talk to me about the future writedowns in terms of the value of the natural gas assets that all of these companies are holding and what you anticipate there. >> well, that's a great question because the energy industry is very capital intensive. access to capital and the cost of that capital becomes very important. what we're really going to have to go through -- we're in the early innings of a process where any company that has a bunch of dry gas reserves on their balance sheets, you have to determine what they're really worth. you brought up the case of exco that's relevant as a result of the downgrade last night. the issue becomes, it's the majority of their assets are -- in a world of the sound bite

here, the question ultimately becomes, what is the intirinsic value of that. it's sort of two different worlds. it's the credit side versus the equity side in the case of exco. but it isn't unique to exco. but their 2018 paper is trading at # 8 88 or 89 cents. >> a lot more pain to come. investors would know you've been write on that. on the long side, we were very early investors in the mlp space. investors love the mlps. tv commercials for those funds. if we look at this chart, you see over the last five years, phenomenal performance. what do you think of the mlp space right now?

is it too overcrowded? >> yes and no. i think you have to be careful in terms of how you think about the world of mlps. people tend to treat the asset class as being what i'll characterize as ubiquitous in nature. you're buying a business and a set of assets when you buy an mlp. if you're buying the index today and this is a very top-heavy index, you're getting exposure to certain sets of assets which you don't want exposure. at the same time, there are some smaller cap and mid cap mlps that are really interesting. back to the macro view, technology is rapidly changing the landscape in north america. it's true on the upstream side

of the business as well as the midstream side. you have to back up the supply chain and understand both sides. there's a lot of opportunity. but it's in very unique and specific mlps. the best-performing mlp last year was up 120%. the worst-performing was down 40%. >> excellent point. there you have it. it sounds to me like if you own the equities of some of these nat gas companies, you may want to take a look at where the bonds are trading. sounds like there may be a disconnect. >> the bonds usually tell a bigger story. coming up next, the possibility of manipulation in the trading of caesars. that ipo is up by more than 60 right now. we have the story in two minutes. in what passes for common sense. used to be we socked money away and expected it to grow. then the world changed... and the common sense of retirement planning became anything but common.

fortunately, td ameritrade's investment consultants can help you build a plan that fits your life. take control by opening a new account or rolling over an old 401(k) today, and we'll throw in up to $600. how's that for common sense? hyundai genesis.w in up to $600. in a new, faster-acting formula. zero-to-sixty in less time than a porsche panamera s. the 429 horsepower genesis r-spec. from hyundai.

caesars spiking as much as 60% in its debut on the nasdaq, up 52% right now. one leading voice in ipos sounding an alarm on the stock. let's send it back to gary kaminsky who's got the ipo financial president, david menlo, on the newsline. >> david, let's get right to it. you called me right after this thing started trading and you wanted to make the point in terms of the size of the flow, what's happening. you have thoughts in terms of how this is going to possibly trade out. share it with us, please. >> i don't believe there's anything illegal that's happening here. obviously, the underwriters, credit suisse and citi, have brought a deal for 1.8 million shares. they do not have to bring enough

shares to satisfy demand. however, what is going to happen now if you take a stock raiding at $13 now and somebody goes in and buys 1.8 million shares and they transfer and ship the stock, who is going to deliver it? i think this is going to be a possible short squeeze without actually anybody being short other than the market makers. the private equity firms are in here now doing what everybody has been accusing the technology firms of doing. only bringing out a small float to create additional demand and that's what's happening here. >> but if in fact somebody decides to buy 1.5 million shares today, let's say right now, and then they decide at the end of the day to sort of take all those shares out of the market, let's say, are you saying that this thing -- that in this case, the specialist or whoever's going to decide the price, they could drive this thing up 200%, 300%, 400% by the

end of the day? >> no, not by the end of the day. it's when somebody says, you have to deliver the stock you sold and they can't deliver it and fulfill the person who's bought the stock. >> educate me. will that be two days, three days? when would the delivery, the fail to deliver take place if, in fact, they want to do this? >> i don't know the exact timing on that. but it's not going to happen this week. it will probably be in the following week after that when everybody realizes there is no stock around. >> wow. >> that, too, david -- are we to expect a massive -- what are you expecting in terms of the trade of the stock? an eventual -- i don't want to say collapse. but decline in the shares, especially when the options could potentially start trading around this thing? >> what absolutely has to happen now and i was against this offering because of the overhanging stock of 12 million shares immediately coming out, i think now that's what's going to be needed to keep the volatility down for the p/e firms to start releasing stock, possibly as early as tomorrow or next week. >> melissa, you see this stock is now up 70%.

david, do you think the s.e.c. completely failed here in essentially green lighting this registration statement as is? >> i don't think they failed in the actual legalities of it. in the practical application of what's going on here, this is a fail of epic proportions. >> a failure of epic proportions. david, thanks for phoning in to the newsline. gary, thanks to you. always good to crystallize these sorts of stories here on wall street. the stock trading at session highs right now. czr up 67%. apple is being sued for using the word ipad. if apple ever had to change the ipad name, what is your pitch to tim cook to rename it? our handle is @cnbcsquawkst. [ mike ] i always wondered how did an airplane get in the air. at ge aviation, we build jet engines. we lift people up off the ground to 35 thousand feet.

these engines are built by hand with very precise assembly techniques. [ mike ] it's gonna fly people around the world. safely and better than it's ever done before. it would be a real treat to hear this monster fire up. [ jaronda ] i think a lot of people, when they look at a jet engine, they see a big hunk of metal. but when i look at it, i see seth, mark, tom, and people like that who work on engines every day. [ tom ] i would love to see this thing fly. [ kareem ] it's a dream, honestly. there it is. oh, wow. that's so cool! yeah, that was awesome! [ cheering ] [ tom ] i wanna see that again. ♪

for you today ? we gave people right off the street a script and had them read it. no, sorry, i can't help you with that. i'm not authorized to access that transaction. that's not in our policy. i will transfer you now. my supervisor is currently not available. would you like to hold ? that department is currently closed. have i helped you with everything you needed ? if your bank doesn't give you knowledgeable customer service 24/7, you need an ally. ally bank. no nonsense. just people sense.

let's get to it. time for "squawk on the tweet." a chinese company says it was using the name ipad long before apple. now they're suing apple for 1:6 billion for trademark infringement. if apple ever had to change the name of the ipad, what should it be changed to? mark tweets, call it the steve pad, gets a lot of jobs done. and it's nearly magical.

harvey tweet, simon nailed it, just shorten it to aptab. all good responses. rick santelli, what are you watching out there? >> you know, not many minutes ago, cme downgraded certain aspects of the cme group. and without getting caught in the min knutia, mf global was mentioned. also another aspect near and dear to my heart. remember during the credit crisis all these derivatives -- toxic derivatives floating in the universe without a good audit trail. bringing them into a clearing apparatus like the cme is a good thing. but it's a good thing to know where everything is but it's another thing that the cme knows how to margin something so digital in nature. think credit default swaps.

gary, weigh in on this. >> i did -- herb greenberg mentioned to me this s&p downgrade a few moments ago. i think it gets back to that earlier conversation in nat gas as well. the credit markets, always smarter than the equity marks. who knows what's going to happen there? but i know the mf thing will not die with people that you and i talk to, although many others want to kill it. >> you know, i think what's sad here is that in the end, if it proves to be malfeasance and fraud at mf, it still isn't going to necessarily make the cme's reputation come back in its entirety. and not to dis the cme, because i think they've done a lot of things right. it's a shame they couldn't have been more proactive in addressing some of these issues in the beginning. they've suffered more in market cap rather than just writing a check. >> i would agree with that. the cme becomes in many cases a silent victim here because they essentially have to do the

service, provide the exchange that had to be there, whether or not they know anything, it doesn't matter. somebody at mf knew something and i cannot believe there hasn't been any consequences yet. >> right. interesting to see the stock move higher today. one of the few bright spots in financial services. rick, thanks a lot. gary, you're watching netflix on top of the caesars ipo. gary? gary kaminsky -- >> did i lose you? >> there you go. >> there was a great story today, netflix. a family got charged $11,000 because one of their kids was on vacation streaming some netflix and they got the roaming charges. parents, beware, $11,000 streaming netflix, not what you exactly wanted. >> can you imagine getting that bill? >> yeah. >> do you think the bill was reversed in the end? >> good question. i'm going to try to find that out. get back to you on that tomorrow. >> i bet you're watching your ds